PepsiCo Inc. Stock Downgraded After Strong Rally

Shares of PepsiCo Inc. took a 0.9% hit in morning trading on Monday, following a downgrade by Wall Street's second-biggest bull. Morgan Stanley’s Dara Mohsenian cut his rating to equal weight from a “multi-year” run at overweight, expressing concerns that the stock has rallied too far.

A Shift in Outlook

After a "strong" second-quarter report on July 13, Mohsenian believes that the stock's recent outperformance has exhausted its catalysts, resulting in limited further upside. He downgraded PepsiCo but maintained his stock price target at $210, which is the second-highest among the 22 analysts surveyed by FactSet.

Analyst Targets

Vivien Azer of Cowen has the highest target at $220 for PepsiCo. However, Mohsenian's downgrade reflects a growing sentiment that the stock has reached its peak after an impressive rally.

Market Performance

While PepsiCo's shares have rallied 3.3% year to date, the Consumer Staples Select Sector SPDR exchange-traded fund (XLP) has lost 0.5%, and the S&P 500 (SPX) has seen a robust gain of 17.7%.

As investors reassess their positions in the beverage and snacks giant, it remains to be seen how this downgrade will impact PepsiCo's future performance.